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ABI backs plan from Britannic for annuities

The ABI is to adopt Britannic Retirement Solutions&#39 propo-sals for the introduction of a standard annuity product as its response to the Government&#39s annuity reform consultation.

The deadline for responses to the joint Department for Work and Pensions and Inland Revenue consultation paper passed last week.

The paper was published this year and set out proposals for introducing limited period and transferable annuities. But many providers, including Clerical Medical and Friends Provident, believe the Government plans will not work and have used the opportunity to push for more wide-ranging suggestions for reform.

The ABI is looking at developing a standard annuity model suitable for the mass market to be used with a decision tree and generic advice. It also wants to explore a money-back guarantee on death.

The standard product was first mooted by Britannic Ret-irement Solutions at an ABI seminar in March. Corporate development director Bob Bullivant will chair the ABI working party set up to develop the plan.

Providers have backed the ABI&#39s proposals, believing a standard annuity product will help the lowest end of the market. Norwich Union believes generic advice and decision trees would work on a fund of less than £30,000.

Prudential and NU also want to see money-back guarantees on death of the annuitant while actuary Watson Wyatt wants to make the annuity market more efficient by forcing providers to offer access to a market-leading rate.

ABI head of life and pensions Alan Woods says: “It is vital that we develop ways to help more consumers access the choice and value for money that already exists.”

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